Written by Alon John
LONDON (Reuters)-European stocks have made early progress in 2025, surpassing Wall Street thanks to the American policy industry and the financial shift in Germany, but the American markets have caught.
The Broad Eurobean Stoxx 600 (^Stoxx) increased by 6.6 % so far this year, starting from Friday, compared to 6.8 % for S&P 500 (^GSPC).
In March, Stoxx was 10 percentage points in the foreground, as he led European bulls to believe that this might be their time after years of European markets in Wall Street.
Calls for European performance are still correct in currencies, with the euro rise by 14 % against the year in dollars so far.
Max Castles, president of UBS Asset Management at UBS Asset Management, said commercial talks and the new US tax train law and spending law are alternating tests outside the United States and to Europe.
“I don’t think we are exceptional will return with the same strength and intensity,” he said. “But I will not exclude the large period of superior performance on European origins on the United States.”
Below is a look at how Europe performs against the United States.
Marija Veitmane, head of stock research at State Street Global Markets, said that the shares of Wall Street began to bounce in mid -April, in part due to the fact that “the trade war has become trade negotiations.”
However, the “real transformation point” was the corporate profit season when “the executive managers of technology stood and said,” Our profits will be very strong. “
Technology represents nearly a third of the S&P 500, and the sector has increased by 24 % since the beginning of April, including its power when US President Donald Trump announced his identification plans.
NVIDIA (NVDA), which again the world’s largest company, increased by maximum market, increased by 45 % more dramatic, and there is nothing in Europe.
But in no way all investors rush to Wall Street with the S&P 500 at record levels, indicating that the assessments are extended.
“The declaration of customs tariffs showed how quickly feelings change and how dangerous these high assessments (the United States),” said Madeleine Roner, director of the upper stock portfolio of DWS, adding that the European reviews showed that the declaration of customs tariffs showed how quickly feelings change and how dangerous these high assessments (the United States), “said Madeleine Roner, director of the Supreme Stock Portfolio, adding that the budget has shown that the feelings changed and the danger of these high assessments (the United States),” adding that European assessments are more affordable.
Although this gap was appropriate due to the growth of slow companies ’profits,” the profits of one arrow) began to grow again, and the difference becomes smaller, which must be reflected in the assessments. “
DWS sees growth in European GDP and European GDP and almost similar in 2025 and 2026, another batch and sustainable profits of European companies.
Investors have cut European stocks, but this is largely focused on the same sectors – defense, an increase of 50 % this year, and the banks increase by 28 %, indicating that there is no faith in the wider market.
The two account for more than 50 % of the return of Stoxx 600, although only 16 % of the index, and BNP Paribas Exane estimates.
This is not surprising because NATO members agreed to increase defense spending, and on a large scale in the case of Germany. But the assessments are extended.
Rheinmetall is trading in Germany at a safe price to more than 50 profits; Even Apple and Microsoft only about 30.
The image is more clear in the currencies, as the euro is at the highest level in four years and concludes with $ 1.20.
At the beginning of the year, many analysts expected the euro to decrease to less than one dollar, thanks to what was then seen as an indisputable demand for American assets.
But when this was reflected, the euro began his appreciation, a step that has grown as foreign holders of American stocks and bonds, for fear of the weakness of the dollar, increased their currencies.
Now the euro is expected to continue to gain even if the external flows from the United States stop.
“No, they do not need to sell American assets to weaken the dollar, but only to say,” No, thank you, “said Deutsche Bank, head of Deutsche Bank.
This step also affects the currency on stock investors, making European stocks cheaper for American investors Wall Street more expensive than Europe.
The S&P 500 may be in a record number for local investors, but at the price of Euro, by 9 % of the February Summit.
“For investors in the euro, the currency ate a lot of US asset returns this year,” said Roner DWS. “If there is another disappointment, in the euro gets worse.”
On the other hand, Stoxx 600 is still shy local currency from the March record, but at a dollar price reached the highest level in late June.
(Alon John’s reports, additional reports from Eurok Bahsali; edited by Dara Ranasing and Hugh Lawson)
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